Sweepstakes saturate Gastonia

By Ragan Robinson

Published: Friday, November 2, 2012 at 07:06 PM.

Gamaras says he chose to put his investment in Gastonia thanks to the fact its regulations were easier to endure. The $14,000 he has to pay annually for 25 sweepstakes machines isn’t cheap. But other cities charge more. Some won’t let sweepstakes operators to serve alcohol. Some don’t allow the businesses except in industrial districts.

“The city of Gastonia opened their arms,” he said. “That’s why we’re here.”

Gastonia outpaces neighbors

Not every place in Gaston is packed with sweepstakes businesses.

Cramerton put its rules in place more than two years ago and hasn’t issued a single permit since, said Steve Baucom, planning director for the town.

Annually, an owner would have to pay the city $1,000 to have a sweepstakes location as well as $1,000 per machine.

On Oct. 17, the state Supreme Court began deciding whether Internet sweepstakes can remain legal in North Carolina.

Five days later, Gastonia’s newest Internet sweepstakes business opened its doors for the first time.

It’s one of nearly 50 Gastonia establishments to start offering the games since the city began permitting them in May.

In all, Gastonia has roughly 260 terminals licensed to run Internet sweepstakes games, according to Drew Pearson, zoning administrator for the city.

So far businesses have paid the city $185,500 for the privilege of hosting the machines.

The money comes from a flat $2,500 any operator must pay the city for the first two terminals, as well as a $500 fee for each additional machine.

Legal questions can’t stem tide

The flood of local business interest in sweepstakes mirrors a statewide trend, says James Mecham. He works with SweepsCoach, a California consulting agency that also develops and supplies sweepstakes software nationwide.

North Carolina is one of the biggest markets for the games, according to the consultant.

Nearby Charlotte appears to be sweepstakes central.

“If you had to pick the most competitive city in the U.S. for sweepstakes, it would probably be Charlotte, North Carolina,” Mecham says.

That is despite the issue’s long and winding path through the state’s legal system. Courts have been dealing with the question of legality since 2010 when the state’s General Assembly first prohibited the games.

State law originally outlawed Internet sweepstakes in 2010.

An appeal put a hold on the ban, which workers in the industry say was erratically enforced.

And after N.C. Court of Appeals judges ruled 2-1 in March that the law banning sweepstakes is unconstitutional, the question went to the state’s highest court.

Judges should make a final decision in the next three months.

‘It’s in God’s hands’

At 777 Sweepstakes, the center that opened on East Franklin Boulevard five days after the state’s highest court turned its attention to sweepstakes, manager Pocca Marshall says she isn’t worried about the future of the industry.

“It’s in God’s hands now,” she says.

Marshall hopes judges will come to the conclusion that companies like 777 are providing much-needed jobs in an economy that needs it.

She also insists the business provides a service over and above sweepstakes, though the games and their potential cash prizes are the main money maker.

Many customers actually use the Internet time they purchase to conduct online job searches or submit applications, Marshall says. With public libraries cutting hours and restricting the time patrons can spend on computers, she says those who can’t afford Internet service at home find places like 777 useful.

The small company competes in a crowded market by offering amenities such as free snacks and soft drinks, Marshall says. They also have a modern location on a busy stretch of East Franklin, right upstairs from the local Democratic Party headquarters.

Gastonia has ‘open arms’

PlayersCasino, its bar walls lined with giant-screen TVs and game rooms flashing with video displays among cushy seating, is in its fifth month in Gastonia’s Franklin Square.

The owner isn’t wringing his hands over what’s happening in the N.C. Supreme Court. He thinks judges will side with sweepstakes owners.

“We’re just sitting back like everybody else and waiting to see what happens,” he said.

The competition isn’t foremost on owner Stephen Gamaras’ mind, either. PlayersCasino, a name he changed from the original PlayerSaloon to better identify the business, isn’t going after the same clientele as other sweepstakes ventures, he says.

Most of the city’s Internet gaming spots — 43 of 49 to be exact — exist as sideline businesses, one or two machines inside a convenience store other other enterprise.

Gamaras calls his place an entertainment venue. Players can win money from the sweepstakes games but they can also go to the bar, catch a game (football Sundays are among the busiest days) or show up for a low-key band or Elvis tribute artist.

The idea is to make PlayersCasino as much like a Las Vegas establishment as possible, says Gamaras, lounging on a red and black leather couch in one of the rooms that populates the former restaurant building.

It can hold 165 people and, with 17 employees, stays open from 10 a.m. until 2 a.m. every day of the week.

Gamaras says he chose to put his investment in Gastonia thanks to the fact its regulations were easier to endure. The $14,000 he has to pay annually for 25 sweepstakes machines isn’t cheap. But other cities charge more. Some won’t let sweepstakes operators to serve alcohol. Some don’t allow the businesses except in industrial districts.

“The city of Gastonia opened their arms,” he said. “That’s why we’re here.”

Gastonia outpaces neighbors

Not every place in Gaston is packed with sweepstakes businesses.

Cramerton put its rules in place more than two years ago and hasn’t issued a single permit since, said Steve Baucom, planning director for the town.

Annually, an owner would have to pay the city $1,000 to have a sweepstakes location as well as $1,000 per machine.

Baucom thinks the absence has less to do with fees than with controls on where a business could open in Cramerton.

The ordinance bars operators from locating within 1,000 feet of U.S. 74, the town’s major thoroughfare. It also restricts the venues to industrial districts.

Gaston County has yet to address the question and “electronic gaming establishments,” as they’re often called in regulatory language, aren’t mentioned anywhere in Gaston ordinances. That means they aren’t allowed, says Ron Smith, a county land use administrator.

Questions from entrepreneurs who wanted to get into the business prompted planners to look into sweepstakes, meaning a public hearing could come as early as January.

Counties can’t charge a fee the way cities can but Gaston intends to set up restrictions on how close the places can be to residential areas, as well as what hours the businesses can operate.

Smith says research into city and town regulations shows how differently the sweepstakes businesses are treated throughout North Carolina.

Some deal with it as they would an arcade.

Others have more restrictive rules for sweepstakes than for adult entertainment, Smith says.